Now You Can Freeze Your Credit Completely For Free: Here’s Everything You Need To Know

Olivia Roos
September 21, 2018

Starting today, Americans can now apply for a credit freeze completely for free. A credit freeze is the most effective method for stopping identity theft as it prevents people from opening a new line of credit in your name.  Under a credit freeze, even the credit holder themselves cannot apply for a new credit card, open a new bank account, or apply for a loan.

Before, a request for a credit freeze would cost $2 to $10 depending on your age and location and the same amount would also apply to a request to unfreeze an account.  Now, the entire process to apply for a credit freeze is free with all three of the credit reporting services at Equifax, Experian, and TransUnion.

The change is in light of last year’s Equifax mega breach which resulted in the loss of $148 million worth of financial records. After that happened, Congress amended the Free Credit Reporting Act and made it free to get a credit freeze in the hopes of encouraging more people to take steps to prevent identity theft.

“We’re very hopeful consumers will take advantage of this new legislation,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center, said in an interview with NBC. “This is one of the most proactive consumer-protect steps people can take.”

Out of all the measures to protect against identity theft, a credit freeze is by far the most effective.  Many people use credit monitoring to protect their identity, but credit monitoring can only alert you when something wrong is going on.  A credit freeze prevents unauthorized new accounts from opening in your name.

Now that the process is completely free and more streamlined than ever, more people can take this strong preventative measure.

Individuals can either apply for a credit freeze online, over the phone or by mail and individuals must make a separate report to each of the credit reporting services.  If the request is made over the phone or online then the freeze will go into effect within one business day, while for requests made via mail it will take three business days.

Requesting a credit freeze will not damage your credit score.  Your bank will still be able to see your credit score, but the credit freeze won’t change it.

If you are in the process of applying for a new credit card or taking out a home or auto insurance loan then freezing your credit might not be the best option for you right now.  However for everyone else, financial advisers strongly advise putting out a credit freeze in order to take the strongest precaution possible to protect your identity.

Feature Image: Twenty20

 

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